GERMANY – Drugmaker Schering cut its pension provisions in half in 2002 – though it put 500 million euros into its main pension trust.

The company said it made 560 million euros in provisions for pensions and similar obligations in 2002, down from 1.03 billion in 2001.

It paid a “one-time” payment of 500 million euros into the Schering Altersversorgnung Treuhand Verein, or Schering Pension Trust, in the year - in addition to regular contributions. The trust is the main funding vehicle for its defined benefit plans.

The DB plans of its foreign subsidiaries “are generally funded”. It made a provision of more than 19 million euros to pay for executive pensions.

“A provision of 19.3 million euros has been recognised for the pensions of former members of the executive board and their dependents; the benefits paid for the year ended December 31 2002 amounted to 1.8 million euros,” Schering said.

It said that provisions for defined benefit pension plans are calculated using the projected unit credit method and reflect future increases in salaries and pensions.

“Actuarial gains and losses are deferred and recognised over the expected remaining service period of the employees participating in those plans, if such gains and losses exceed 10% of the obligation,” the drugs firm said in its 2002 annual report.

Schering saw its 2002 operating profit rise 11% to 741 million euros.